South Korean brands drop campaigns with K-drama star Cha Eun-woo amid tax allegations

Multiple South Korean brands have pulled or quietly sidelined advertising campaigns featuring actor and K-pop star Cha Eun-woo amid allegations that he may have avoided 20 billion won (US$13 million) in taxes via a shell entity under his mother’s name.Banks and consumer brands including Shinhan Bank and skincare label Abib have set s featuring Cha to private on their social media accounts, while wellness firm BodyFriend is considering replacing him in its promotional campaigns, according to local media.The moves follow reports that the National Tax Service last year notified Cha of a substantial additional tax assessment after determining that a company founded by his mother functioned as a paper firm, Edaily reported.According to the report, the company signed an agreement with Fantagio, Cha’s agency, to manage his entertainment activities, after which his earnings were distributed among Fantagio, the company and Cha himself.Cha Eun-woo in a still from “A Good Day to Be a Dog”.Tax authorities reportedly concluded that the arrangement allowed revenue to be channelled through the firm in a way that reduced Cha’s overall tax burden by more than 20 percentage points.Cha’s team has since filed for a pre-assessment review, a formal procedure allowing taxpayers to contest a tax authority’s interpretation before a final decision is issued.